Velocity Financial (NYSE:VEL) released preliminary unaudited results for the fourth quarter and full-year 2025 on Monday, showcasing a year of aggressive expansion and improving credit metrics.
The company, which specializes in financing for residential and commercial real estate investors, expects fourth-quarter net income to hit at least $35 million, representing a surge of 70% compared to the prior-year period.
The profit jump was fueled by a significant increase in lending activity.
Total loan originations for the fourth quarter reached approximately $635 million, up 13% year-over-year.
For the full year, the company's production was even more robust, with total originations of approximately $2.72 billion—a 48% increase over 2024.
This volume push has significantly scaled the company's balance sheet.
Velocity’s total loan portfolio unpaid principal balance (UPB) reached approximately $6.49 billion as of December 31, 2025, a 28% increase from the previous year.
Despite the rapid growth, the company successfully managed its risk profile; nonperforming loans as a percentage of total UPB dropped to between 8.5% and 8.6%, down from 10.7% at the end of 2024.
Management also reported that the portfolio's net interest margin (NIM) remained resilient, finishing the year at an estimated 3.57%.
This stability in margins, combined with higher volumes, drove full-year GAAP earnings per diluted share to at least $2.75, a 35% increase over 2024.
Stockholders’ equity also saw a healthy boost, rising at least 30% to $675 million.
This translates to a GAAP book value per diluted share of at least $17.15, up from $14.26 a year ago.